2 Rhode Island men to go to trial in $25M investment fraud

Men accused of stealing identities of terminally ill

Published 5:10 PM EST Nov 12, 2012

PROVIDENCE, R.I. -

Two men accused of stealing the identities of terminally ill people and using them to reap $25 million from insurance companies and brokerage houses are scheduled to go to trial in federal court on Tuesday, facing dozens of counts of wire and mail fraud, identity theft, money laundering and conspiracy.

Joseph A. Caramadre, a well-known philanthropist and estate planner, and his former staffer, Raymour Radhakrishnan, were charged a year ago in the alleged scheme and pleaded not guilty.

Prosecutors say they took out variable annuities and so-called "death-put" bonds that would pay out when a person died. A death put allows the beneficiary of a deceased person's estate to sell the bond back to the issuer if the beneficiary dies or becomes legally incapacitated.

They allegedly placed an ad in the Rhode Island Catholic newspaper that offered $2,000 to people who were terminally ill.

When people responded, they allegedly lied to them and their families and got personal information that was then used to purchase bonds and annuities in their names without their consent. Among other things, they are accused of forging some signatures in order to open brokerage accounts. They allegedly looked for people with less than 3 to 6 months to live.

Then, they cashed in when the people died, according to a 66-count indictment from November 2011.

Prosecutors say the men and a group of investors bought 200 annuities, investing at least $125 million, and 77 brokerage accounts, from which they purchased death-put bonds. They received $15 million from the annuities and $10 million from bonds, according to the indictment.

The trial is expected to last two to three months and will contain video testimony of terminally ill people who became part of the plan.

A spokesman for Caramadre said at the time of the indictment that he could never take advantage of anyone, and that federal prosecutors were led astray by an insurance industry "upset it got beat at its own game with products they designed and offered to the investing public."

In addition to the charges of fraud, identity theft and conspiracy, Caramadre is charged with one count of witness tampering.

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